The
pound was in freefall this morning as results from the EU
referendum came
in and Brexit appeared more and more likely.

The
pound lost more than 10 per cent against the dollar and plunged below
$1.35.

A
bombshell result in Sunderland, which far exceeded expectations in
the Leave camp, provoked fierce new jitters in the City.

The
pound immediately plunged 3 per cent after the Sunderland result and
at 2am was more than 5 per cent off against the dollar. The market
rebounded some of the lost ground after Wandsworth voted strongly for
Remain.

But
at around 3.30am as expectations of a Brexit vote grew and it became
the bookies favourite for the first time, Sterling dropped like a
stone.

The
pound dived by 3 per cent as the result in Sunderland was announced
and revealed a huge win for the Leave campaign. It crashed further to
almost 6 per cent down after Swansea was announced for Leave before
rebounding a little as London's first results came through in
Wandsworth

The
FTSE-100 was also expected to open sharply down when trading resumes
at 8am.

Analysts
said the instant dive in the value of the pound was the deepest since
Black Wednesday in 1992 - but the figure is expected to rebound over
the course of a rollercoaster night.

The
prospect of a Brexit vote had sent repeated shudders through the
markets in recent weeks.

Chancellor
George Osborne's former economic adviser, Rupert Harrison, said the
fluctuations in the pound were 'an expression of the deep uncertainty
that is going to face businesses all around the country and indeed in
the whole of Europe'.

'How
can they invest when they don't know what is going to happen next,
what their trading relationship is going to be,' he told ITV News.

'We've
had a lot of predictions during the campaign, the economics
profession amazingly united saying this would be a negative shock to
the British economy and I think we are seeing indications of that in
these market moves tonight.'

Shadow
chancellor John McDonnell told BBC News: 'That is exactly the sort of
shock we were expecting so I would expect the Bank of England to
intervene in the morning.

'Chancellors
and shadow chancellors can't comment on sterling but what we can do
is have a mature approach to this and say whatever the outcome, we
will negotiate the best deal we possible can with regard to our
trading partners in Europe and in that way we might give some
assurances to the market.'

The
pound hit fresh 2016 highs against the dollar and the euro today in a
further sign that City traders remain convinced the Remain camp will
eke out a win in the EU referendum.

The
spike in the value of the pound above $1.50 after 10pm will be seen
as a fresh vote of confidence in Britain remaining in the EU.

Michael
Hewson of CMC Markets said: 'As the final poll from YouGov hit the
wires sterling pushed back higher again towards the 1.50 level.

'With
Nigel Farage also admitting that Remain may have edged it, it would
appear that the fat lady is in the act of clearing her throat and
readying herself to sing.'

A
trader was working through the night as the Leave campaign took a
massive lead, sending the pound into free fall in the early hours

The
pound has now surged by 5% over the past seven days as Brexit fears
have receded, enjoying its best weekly performance since 1985 and
reclaiming all its losses since the start of the year. On Monday,
sterling notched up its biggest one-day gain against the dollar for
nearly eight years.

Currency
analysts expect volatility whichever way the vote goes.

Joe
Rundle, of ETX Capital, said: 'Markets have been betting heavily on a
Remain vote all day, with the FTSE and sterling rising strongly as
polls point to Britons giving Brexit the thumbs down.

'For
now markets are pretty calm but these are only forecasts - we're
waiting for the first declarations from the first counts to get a
clearer picture.'

Sterling
has continued its recent revival, after weeks on the slide amid fears
over polls showing a strengthening Leave vote.

It
initially rose by 0.4 per cent to $1.49 today - a 6 per cent rise
since this time last week - but gave back some gains to trade at
$1.48 towards the end of the day. Against the euro the pound is
worth more than €1.30, up from €1.26 a week ago.

Meanwhile
holidaymakers have been snapping up foreign currency - in what some
have termed 'panic buying' - in anticipation of their summer holidays
in Europe.

Queues
outside currency exchanges across the UK have mounted amid fears that
a Brexit win tomorrow would lead to the pound crashing, leaving
Britons across the Continent short changed.

UKForex
said it has witnessed a 100 per cent increase in consumers making
transfers from sterling to euros in last 24 hours

William
Shepherd, of UKForex, 'If the UK opts to leave, the pound could
fall as much as 20 per cent. Consumers could lose up to £1,398 on a
£10,000 transfer, compared to today's rate.'

Earlier
this week, billionaire George Soros - who forced then prime minister
John Major to pull Britain out of the 'European Exchange Rate
Mechanism' in 1992 - claimed the collapse in the value of the
pound on Friday could be even bigger than Black Wednesday if Britain
votes for Brexit and he warned it would leave people poorer.

Currency
and stock markets have been on a roller-coaster ride during the
referendum campaigning, plunging over the past fortnight as a
succession of polls showed a Brexit lead.

The
Post Office said overall currency sales in its branches and online
were up 74 per cent since the weekend. Online, sales were up 381
per cent on the same day a year ago.

Right
call?: The pound has now leapt 1.2 per cent against the dollar to
$1.4880, its highest level since December, but have currency traders
called it correctly or have they been too reliant on the bookies?

Travelex
said its online currency orders had increased by 30 per cent from
June 14 to June 21.

But
it is not just holidaymakers worried about losing out in the face of
a Brexit vote.

In
the City of London banks - including UBS, HSBC, Morgan Stanley and
Bank of America Merrill Lynch - have written to clients telling them
to prepare for disruption once the EU referendum result is declared.

According
to an article in the Times today, the banks said that they could not
guarantee to 'make a market' by acting as intermediaries between
buyers and sellers.

If
so, the Bank of England might have to step in to buy assets as a
'market maker of last resort', as it did in 2009.

Voting
got underway this morning amid torrential downpours as analysts said
that currency traders have been using the bookies and polls to gauge
the likely referendum result.

A
phone survey from ComRes for ITV gave the Remain camp 54 per cent of
the vote compared to Leave's 46 per cent, while YouGov had victory at
a much slimmer margin with just 51 per cent voting to Remain against
Leave's 49 per cent.

The
last poll from IPSOS Mori put Remain in the lead with 52 per cent,
while the Leave camp was at 48 per cent.

At
the same time a Remain vote is now 84 per cent on according to odds
compiled by Betfair, compared to 22 per cent for Leave. Ladbrokes
puts the chance of Brexit at only 27 per cent.

FXTM
chief market strategist Hussein Sayed said: 'The markets are being
completely reliant on the predictions from the bookies, which
strongly expect Remain to win the referendum.'

He
added: 'There is currently no real explanation to provide as to why
city firms are confident on a remain outcome, although it does appear
to me as if the correlation between the probability from bookmakers
is what is being mirrored in the markets.

'The
risk with this is that the market are currently discounting against
the repeated indications from preliminary polls that have indicated
again and again that the outcome should be close.'

And
worryingly the polls have also revealed that as many as 17 per cent
of voters are still undecided about whether they will vote Remain or
Leave and this has made many in the City nervous.